First Look

Working Papers

Fairness, Efficiency and Flexibility in Organ Allocation for Kidney Transplantation

Abstract

We propose a scalable, data-driven method for designing national policies for the allocation of deceased donor kidneys to patients on a waiting list in a fair and efficient way. We focus on policies that have the same form as the one currently used in the United States. In particular, we consider policies that are based on a point system, which ranks patients according to some priority criteria, e.g., waiting time, medical urgency, etc., or a combination thereof. Rather than making specific assumptions about fairness principles or priority criteria, our method offers the designer the flexibility to select his desired criteria and fairness constraints from a broad class of allowable constraints. The method then designs a point system that is based on the selected priority criteria and approximately maximizes medical efficiency, i.e., life year gains from transplant, while simultaneously enforcing selected fairness constraints. Among the several case studies we present employing our method, one case study designs a point system that has the same form, uses the same criteria, and satisfies the same fairness constraints as the point system that was recently proposed by U.S. policymakers. In addition, the point system we design delivers an 8% increase in extra life year gains. We evaluate the performance of all policies under consideration using the same statistical and simulation tools and data as the U.S. policymakers use. Other case studies perform a sensitivity analysis (for instance, demonstrating that the increase in extra life year gains by relaxing certain fairness constraints can be as high as 30%) and also pursue the design of policies targeted specifically at remedying criticisms leveled at the recent point system proposed by U.S. policymakers.

Download the paper: http://www.hbs.edu/research/pdf/12-025.pdf

Multi-Sided Platforms

Abstract

The economics of two-sided markets or multi-sided platforms has emerged over the past decade as one of the most active areas of research in economics and strategy. The literature has constantly struggled, however, with a lack of agreement on a proper definition; for instance, some existing definitions imply that retail firms such as grocers, supermarkets, and department stores are multi-sided platforms (MSPs). We propose a definition that provides a more precise notion of MSPs by requiring that they enable direct interactions between the multiple customer types that are affiliated with them. Several important implications of this new definition are derived. First, cross-group network effects are neither necessary nor sufficient for an organization to be a MSP. Second, our definition emphasizes the difference between MSPs and alternative forms of intermediation such as "re-sellers," which take control over the interactions between the various sides, or input suppliers, which have only one customer group affiliated as opposed to multiple. We discuss a number of examples that illustrate the insights that can be derived by applying our definition. Third, we point to the economic considerations that determine where firms choose to position themselves on the continuum between MSPs and resellers, or MSPs and input suppliers.

Download the paper: http://www.hbs.edu/research/pdf/12-024.pdf

Intermediaries for the IP Market

Abstract

During the past decade, a variety of intermediaries have emerged to facilitate the trading of patents: brokers, non-practicing entities (NPEs), defensive aggregators, online platforms, auctions, and unique entities such as Intellectual Ventures. We discuss the fundamental causes for the lack of liquidity in the IP market and analyze the merits and shortcomings of the various business models used by patent intermediaries. A key conclusion is that platform-type intermediaries (that facilitate transactions without taking possession of assets) have struggled, whereas merchant-type intermediaries (that acquire patents and seek to monetize them directly) have reached significant scale and influence in the technology industries that fall under the incidence of their assets. We also discuss some efficiency issues raised by the growing prominence of patent merchants.

Download the paper: http://www.hbs.edu/research/pdf/12-023.pdf

Engaging Supply Chains in Climate Change

Abstract

Suppliers are increasingly being asked to share information about their vulnerability to climate change and their strategies to reduce greenhouse gas emissions. They vary widely in their responses. We theorize and empirically identify several factors associated with suppliers being especially willing to share this information with buyers, focusing on attributes of the buyers seeking this information and of the suppliers being asked to provide it. We test our hypotheses using data from the Carbon Disclosure Project's Supply Chain Project, a collaboration of multinational corporations requesting such information from thousands of suppliers in 46 countries. We find evidence that suppliers are more likely to share this information when requests for information from buyers are more prevalent, when buyers appear committed to using the information, and when suppliers belong to a competitive industry. Moreover, we found evidence that these three factors also influenced the comprehensiveness of the information suppliers shared and whether they would also share the information publicly. Finally, we found that suppliers in countries with greenhouse gas regulations were more likely to include quantitative emissions data and reduction targets in the information they shared.

Download the paper: http://www.hbs.edu/research/pdf/12-026.pdf

"CEO Bonus Plans: And How to Fix Them

Abstract

Almost all CEO and executive bonus plans have serious design flaws that limit their benefits dramatically. Such poorly designed executive bonus plans destroy value by providing incentives to manipulate the timing of earnings, mislead the board about organizational capabilities, take on excessive (or insufficient) risk, forgo profitable projects, and ignore the cost of capital. We describe the causes of the problems associated with widely prevalent executive bonus plans and offer our recommendations for fixing them. We focus on choosing the right performance measure, determining how performance thresholds, targets, or benchmarks are set, and defining the pay-performance relation and how the relation changes over time.

Download the paper: http://ssrn.com/abstract=1935654

Performance Tradeoffs in Team Knowledge Sourcing

Abstract

This research examines how teams organize knowledge sourcing (obtaining access to others' knowledge or expertise) and investigates the performance tradeoffs involved in two approaches to knowledge sourcing in teams. One approach a team can take is to specialize, such that a small number of members source knowledge on behalf of the team. This specialized knowledge-sourcing approach lowers search costs. The other approach has most or all team members engaging in knowledge sourcing. This broad approach means that more team members interact directly with the knowledge source, and thus may understand the knowledge better. These options present a sourcing paradox: teams cannot reap the advantages of specialized sourcing and the advantages of broad sourcing. They face performance tradeoffs. Further, under some conditions performance tradeoffs will be more pronounced. Specifically, specialized knowledge sourcing depends on within-team knowledge sharing, and so conditions that hinder knowledge sharing in a team are likely to reduce the effectiveness of the specialized approach. Using archival data from several hundred software development projects in an Indian software services firm, we find support for most of our hypotheses. Our findings offer insight for theory and practice into how team organization, organizational knowledge resources, and within-team knowledge sharing can aid team performance.

Download the paper: http://www.hbs.edu/research/pdf/11-031.pdf